Corporation Tax

Pennywise

the_engineer wrote: »

mtfree

I had considered self employment but the worry of 'hoping' that I would be IR35 complient in its interpritation was to much to contemplate. This way though more convoluting I can pay myself a dividend at a much reduced rate of tax at the end of the year (not bothering with a salary will also mean no D0 tax code and no NIC, as I understand it).

You've got this completely the wrong way round. IR35 only applies to Limited companies and partnerships, not sole traders. You have given yourself an IR35 potential problem in that if IR35 applies, you have to pay yourself under PAYE with the resultant tax, employees NIC and employers NIC which will cost more in tax and NIC that had you been a sole trader.

Given the small turnover and your obvious confusion with limited company operation, I'd suggest you scrap the company and register self employed and move forward as a sole trader. Assuming the company hasn't traded yet, you just fill in a form and send it to Companies House with their striking off fee of £15 - a hell of a lot simpler than worrying about preparing and submitting full company accounts, preparing corporation tax returns, etc. Do it now before you get too deep.

Unless you have the time and inclination to attend the HMRC courses, and properly research HMRC and Companies House websites for the proper way of running a limited company, you will need an accountant. By comparison, filling out the self employment pages of your tax return as a sole trader is easy-peesy compared with the formalities of a limited company.

Yorksblue

Pennywise wrote: »

You've got this completely the wrong way round. IR35 only applies to Limited companies and partnerships, not sole traders. You have given yourself an IR35 potential problem in that if IR35 applies, you have to pay yourself under PAYE with the resultant tax, employees NIC and employers NIC which will cost more in tax and NIC that had you been a sole trader.

Given the small turnover and your obvious confusion with limited company operation, I'd suggest you scrap the company and register self employed and move forward as a sole trader. Assuming the company hasn't traded yet, you just fill in a form and send it to Companies House with their striking off fee of £15 - a hell of a lot simpler than worrying about preparing and submitting full company accounts, preparing corporation tax returns, etc. Do it now before you get too deep.

Unless you have the time and inclination to attend the HMRC courses, and properly research HMRC and Companies House websites for the proper way of running a limited company, you will need an accountant. By comparison, filling out the self employment pages of your tax return as a sole trader is easy-peesy compared with the formalities of a limited company.

Makes alot of sense